Malta Budget 2016: Selected highlights
Jan2016

Malta Budget 2016: Selected highlights

07 January 2016
Stable growth and positive pro-business outlook

During 2016 the Maltese economy is expected to grow by 3.6 % (after 5.3 % in 2015). The rate of inflation is projected to increase to 1.5 % in the running year. Thus the Maltese Islands remain a stable and attractive economic hub in the Mediterranean with sound growth perspectives.

Companies and Enterprise

  • Registration fees for companies having a share capital of less than EUR 1,500, which are registered electronically, have been reduced to EUR 100.
  • Start ups: Malta Enterprise will be launching a new scheme to assist new start - up companies. Assistance will be in the form of financing of up to €200,000 repayable over 10 years. This assistance can increase to €500,000 for enterprises engaged in the development of high value added innovative products, processes or services and can be used to finance the purchase of equipment.
  • Enterprises employing PhD graduates and postgraduate students reading for a doctorate in science, IT or engineering will be given a maximum €10,000 tax credit when the employment of such person is retained for a minimum period of 12 months.

Income Tax

The tax - free bands have increased as follows: Single rates up to EUR 9,100 per annum, married rates up to EUR 12,700 and parent rates up to EUR 10,500 per year.

Concerning personal income tax rates for the basis year 2016, please view: https://ird.gov.mt/services/taxrates.aspx#2016.

Property Market

  • First time buyers will be exempt from the payment of duty on documents up to a maximum of EUR 5,000 on their first property.
  • Purchasers of properties in Urban Conservation Areas(UCA) shall benefit from reduction in duty on documents to 3.5 %, provided the final deed of sale is entered into between 1 January 2016 and 31 December 2016.
  • Inherited properties may be sold after 3 years if the majority of the heirs so wish. This is sought to be a major enhancement for the Maltese property market in terms of flexibility.
  • The 15 % final withholding tax applicable to rental income received from residential property has been extended to cover income from the rental of commercial property, but will exclude rents between related parties.

Environment

  • As from 1 April 2016 an environment contribution shall be charged to all tourists over 18 years of age visiting Malta, at a rate of EUR 0.50 cents per night up to a maximum of EUR 5 per visit. This cannot be viewed as really tourist - friendly and it has to show whether the related administrative cost is not going to eat up the earnings, intended to be used for the upgrading or maintenance of prominent public areas on the island.
  • MEPA, the Malta Environment and Planning Authority, will be split and a new Authority for the Environment and Resources will be formed. This measure should lead to a better environment awareness and protection, but also to a more efficient planning and permit process.

Tourism

  • A new Institute of Tourism Studies shall be built in Smart City Malta with an investment of EUR 56 million, hopefully leading to a better positioning of the Maltese Islands in this sector
  • A Mediterranean Tourism Forum will be set up with a contribution of EUR 300,000 form the Government side.

Gozo

  • It is intended to develop a site in Gozo to be used by new companies offering innovative and creative services such as companies specialised in IT and enterprises related to the film industry; the application for EU funds has been submitted.